Stock Market SPX Index Below Key Supports

The SPX Premarket declined beneath the 2-hour Cycle Top at 1994.33 and the weekly mid-Cycle support at 1993.04 this morning.

ZeroHedge Reports, “In the aftermath of last week's disappointing G-20 Shanghai summit, there was much riding on this weekend's start of the China's People's Congress, and specifically what if any stimulus announcement Beijing will make; sadly for stimulus addicts Chinadisappointed and after the unimaginative scope of growth proposals none of which it will come remotely close to hitting, it is hardly surprising that European stocks and US equity futures have taken a leg lower, even if Chinese stocks rose and certain commodities such as Iron Ore soared overnight on hopes China will either "rationalize" capacity or at least build some more roads to nowhere. Others, such copper were less lucky.”

Again, “On Thursday, after 7 years of having an overweight or at least neutral stance on equities, JPM "for the first time this cycle" went underweight stocks.”

TNX is higher again this morning. Whether it touches the Head & Shoulders neckline or not is still uncertain. However, Sunday was a Primary Pivot day, suggesting that the period of strength has ended. If correct, we should see TNX coming down rather abruptly.

Bloomberg reports, “Demand is so great for benchmark 10-year Treasuries in the $1.6 trillion market for borrowing and lending U.S. government debt, and supply is so short, that traders are willing to pay to lend cash to get their hands on the issue.

The overnight repurchase agreement rate on the newest 10-year note was negative 2.85 percent at 8 a.m. New York time Monday, the lowest for any Treasury note or bond, according to ICAP Plc data. In the parlance of the repo world, that means the maturity is on ‘special,’ signaling heightened appetite for this specific security in deals where traders exchange the debt for overnight cash. In agreements lasting one month, the rate was as low as negative 1 percent last week, the most special since mid-2008, according to JPMorgan Chase & Co.”

Shades of ZeroHedge…

Regards,

Tony

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